E242: Gen Z, Dopamine, and the New Investing Playbook

Speaker 1 You dropped out of Harvard at 18 years old. You've since raised $47 million for dub.

Speaker 2 What is Dub? Dub is the very first regulated copy trading platform. And very simply, instead of trading stocks in our app, we actually just copy what other people are doing.

Speaker 2 The whole thesis is that most retail investors will never get good at investing. Figures put at 70 to 90% of retail investors underperform.
They love the action of sort of trading.

Speaker 2 But how do we channel that into a better way for better financial outcomes? There's no better thing than just following what proven experts are doing in the markets.

Speaker 2 If you take a big step back, it's actually nothing new what we're doing with copy trading. When you have money, you've got $50 million, you're not trading yourself.

Speaker 2 You're hiring a fancy wealth manager at Goldman Sachs, you're going to hedge fund like Citadel, you're trusting the experts to deploy your capital.

Speaker 2 We want to enable anyone with $100 to do that same experience.

Speaker 1 Preparing for this interview, I did some research. I was shocked.
20 to 25% of all trading in the market is retail.

Speaker 1 What are the confluence of factors leading to kind of such a large chunk of trading being retail?

Speaker 2 Yeah, you're absolutely right. It's actually exploded over the past 10 to 15 years, probably doubled at least in terms of the retail trading volume.

Speaker 2 It's gone as high as like 35% today in many estimates now, and it's only going to increase.

Speaker 2 And this is really the experience that I felt, the revolution of the retail investor since really Robin Hood ignited the wave with free investing.

Speaker 2 And over the past, I think, if you look at it 10 years, there are traders like me that grew up as kids who are sitting by a bunch of screens, now were able to invest for the very first time and streamline and open that brokerage account in 10 minutes.

Speaker 2 And that accessibility

Speaker 2 came from an explosion was one of the first parts. Right now, many more people could get access to trading.
But two was really retail investing becoming part of the cultural zeitgeist.

Speaker 2 Think about what happened in 2020, 2021. In many estimates show, 30 million new retail investors came online for the first time.

Speaker 2 And it wasn't about behind, sitting by a bunch of screens anymore and looking at the fundamentals. It was about following people, ideas, and narratives to invest.
We saw this in meme stocks.

Speaker 2 We saw this to crypto.

Speaker 2 Elon was moving the Dogecoin markets every tweet, and superstar fund managers like Kathy Woods, Bill Ackman were raising tens of not, if not hundreds of billions of dollars in their funds.

Speaker 2 So, and I think that was just emblematic of really many ways just social media, mobile era coming to investing.

Speaker 2 And that drove a lot of this ability to have these online communities with Wall Street Bets, Reddit, X, and everything that we've seen about social and finance, the confluence of that.

Speaker 1 It's almost like this memetic behavior. People were sitting around COVID with nothing to do, and they started trading almost like playing Warcraft or playing Halo.

Speaker 2 Absolutely. And that was me.
That was the original inspiration for Dub.

Speaker 2 I was 19 years old. I was sitting in my dorm at Harvard, and we were part of the first COVID generation at school.
So we're basically locked up

Speaker 2 in our dorms. You couldn't go to anyone else's room.
So all I did was I was just trading. And I had grown up doing a lot of trading and starting second grade.

Speaker 2 But I got really serious during that COVID era where everyone was getting stimulus checks.

Speaker 2 Everyone had $1,000 to deploy in the market, and no one wanted to miss out the memetic desire and FOMO, where every single last person, your dumbest friend, was now making $100,000 in Dogecoin, right?

Speaker 2 Who's not going to give that a shot?

Speaker 1 Yeah, it's hard to lose when there's so much money printing.

Speaker 2 Absolutely. And also,

Speaker 2 I think what people don't see about that narrative was in 2022, when the markets mean reverted, it crashed, the markets came down, and we had a couple of years of sort of

Speaker 2 choppiness.

Speaker 2 That's where a lot of people lost money game stop um 80 of people who invested in game stop actually lost money totality but the only thing that people hear about is the run up so this is part of dubb's mission is how do we get people not to just invest but invest better you dropped out of harvard at 18 hopefully your mom and mother did not have a heart attack but when did you know was the right time to drop out and what did you need to see in order to do that yeah so it was actually pretty lucky where my first time leaving or dropping out of school was was in high school so i left high school when I was 16 to do my first company.

Speaker 2 It was a virtual reality ed tech company that absolutely failed. It was called Realism.
But that was my school hard knocks. I moved my two co-founders to Boston.

Speaker 2 We raised a little bit of venture capital. We lived in one bedroom and we all had like three airbeds.

Speaker 2 And then I think after that experience,

Speaker 2 we were lucky. We sold the company.
We had some patents pending. We had some good IP, but the business didn't work.
That gave me the fortitude and the know-how of like at least how to get started.

Speaker 2 So when this time came around and I saw this opportunity, I'm a product guy myself and I was going to be the customer because I was participating in this wave.

Speaker 2 I was like, how do I get the ball rolling? And the first people I called were my previous semesters from the company that I'd sold in the past. And they're like, blank check for you.

Speaker 2 No matter what, we're going to do whatever.

Speaker 1 So they de-risked it.

Speaker 2 They really did. And that gave me the confidence to go to the next step.

Speaker 2 And then I actually didn't even tell my mom when I decided to leave school to start this company because I had already raised money and I was able to pay myself. I guess I was financially free.

Speaker 2 And I knew this is what I wanted to do. I think in many ways, also COVID school kind of sucked.
So it was a natural path to go and build.

Speaker 2 And I sort of saw this consumer behavior wave that might come once in my lifetime with how retail investing was changing. And I wanted to seize the moment and go build something pretty incredible.

Speaker 1 A lot of people think that these

Speaker 1 kind of quitting, quitting college, like Mark Zuckerberg also quit after he had traction on Facebook. So a lot of people think he decided to quit and then he figured his way out.

Speaker 1 It's not necessarily binary. It's not like you have to quit and come up with an idea or never quit.
It's about a risk-adjusted decision-making.

Speaker 2 I was in a very fortunate place. Also, 2021 was definitely one of the top peaks of the venture market.

Speaker 2 So, and it just happened that Robinhood IPO'd, Coinbase IPO'd, FinTech was the hottest thing on the market.

Speaker 2 So I also saw that and then wanted to seize that opportunity to go build something where there's true enterprise value being created and customer demand.

Speaker 2 And I think that's exhilarating for me to go work on too. And you can see the impact of what you're doing.

Speaker 1 How long did it take you for to talk about your story that you're this 18, 19 year old?

Speaker 1 I'm sure there's some hesitation to kind of come out of the closet of being young and being such a young entrepreneur.

Speaker 2 The one thing that's unique about Silicon Valley is there are a couple of these stories now.

Speaker 2 So they really appreciate you more for your substance and your intellect and the logical outcomes of what you're doing rather than sort of the age.

Speaker 2 And part of it too was, I think, like, how do I de-risk that, right?

Speaker 2 And in many ways, I knew building this business was going to require a lot of skills that I just never, never was able to accumulate or may never go have just because I've been in the industry for that long.

Speaker 2 Like, I don't know the first thing about back then about like compliance. I don't, I didn't know sort of all the regulatory regimes.
I didn't have any of the licenses, right?

Speaker 2 It might take me years to go get those things done. So I hired a phenomenal chief compliance officer that's double my age.
And now he covered that.

Speaker 2 A big part of building the business has been covering my weaknesses and really allowing myself to focus on the superpowers. And that applies to everyone.

Speaker 1 It's interesting because

Speaker 1 there's certain things that need to happen in every business. And every business kind of hits this roadblock.

Speaker 1 And sometimes it's not obvious what the founder should be doing and what the founder should be hiring for. Or sometimes the founder figures something out enough to know what to hire for.

Speaker 1 Walk me through as you scale, you've scaled now to millions of users. How do you solve those problems?

Speaker 1 How do you know when you should be doing something when a current team member or whether you should hire someone?

Speaker 2 It was a lot of falling my face and screwing up. In the very beginning, I think one of the biggest lessons that I learned was what got me here is not going to get me to where I want to go.

Speaker 2 And when I started the business, and the way I grew up was like very individualistic. We were poor, but I had very tough Asian parents.
They're like very disciplined.

Speaker 2 You got to do everything followed by the book. And that's what I did.
And I grew up in an environment of fear, but I was motivated by fear to go succeed.

Speaker 2 And I thought that was the right way to manage as well, because that's how my parents manage me.

Speaker 2 So when I first started the team, I was the worst micromanager. I was up in the weeds of sort of every single person.
I thought everyone had to stay late until eight, nine o'clock.

Speaker 2 This is the startup grind. We got to live like how everyone else is.
996. 996 for true.
I still do it personally. I do 997, whatever, but I'm in a different boat.

Speaker 1 I've had the same issue. Like, I think everybody should be hardcore, as Jan puts it.
If you're too flexible on that, you end up having a mediocre culture.

Speaker 1 How do you balance this need for like an extremely great culture with not being a psychopath?

Speaker 2 It's very difficult. And the one thing that I think has worked for me has been filtering and hiring for people that are innately that that will do it without me asking.

Speaker 2 I've realized the better way to lead, and what's been working much better for me, or at least has been working for our team as I've recovered from these mistakes, has been motivating leading not through fear, but inspiration, opportunity, and driving outcomes in the success of what we're doing.

Speaker 2 And when you can have that intrinsic motivation come out,

Speaker 2 that

Speaker 1 there you go.

Speaker 1 Her Zoom background has made a lot of noise. It's kind of banger.

Speaker 1 Sometimes that happens at a New York Stock Exchange.

Speaker 2 Sometimes, yeah. Wow.

Speaker 2 Good. Good.

Speaker 2 We're good.

Speaker 1 So double-click on that. So you're looking for people with that kind of drive.

Speaker 1 Are many of your employees today kind of 996 or more realistically working till 7 or 8 or working in the evening after they come home? Yeah. And talk to me about the the culture today at the

Speaker 2 my policy now of the team is I don't inspect first. I expect greatness out of you.

Speaker 2 And I think when you are sat down and you're expected and your boss tells you, I'm expecting real great things, you're just naturally more motivated to go crush it.

Speaker 2 And I don't actually care if you're in the office when you're working, right? I think like I, when I hire you, I'm giving you an immense amount of trust.

Speaker 2 And I trust that you know your best work style, your best work environment.

Speaker 2 So if you got to go home for the rest of the day at like five or six o'clock and you're just going to be better at home grinding for two or three more hours, I completely, no questions asked.

Speaker 1 How do you determine whether you want someone that's going to work their ass off or somebody that's going to, that's has 20 years of experience doing this one thing and could literally check out at five o'clock and be five times more effective than this person?

Speaker 2 I don't think it's binary. Some of our best guys in our team, the older folks, my executive leadership team, they're maybe double my age, but they're still grinders.
They might have kids.

Speaker 2 They're much older, but they just love staying in the game.

Speaker 1 Do you have any of those, though, that are just so good? They just come in for eight hours and they just crush? Or does that hurt your culture?

Speaker 2 It's not aligned with their culture.

Speaker 1 Yeah, I think, especially it affects other people as well on the team. Yeah.

Speaker 2 And I don't think like people who come in for eight hours and crush, they may be good at repeating their skill set and their experience.

Speaker 2 But to me, if they're just there for eight hours, they're not truly bought in, right?

Speaker 1 They're just checking in and checking out.

Speaker 2 Exactly. That's emblematic of some.
I want people who love what we're doing, are students of the game, and care about being in the arena. And I try and viciously filter for that in my interviews now.

Speaker 2 And one thing that I was too scared to do in the past was anti-sell during my interviews.

Speaker 2 Of course, it's just selling the pitch of sort of getting someone in, inspiring them by the vision and the traction. But now it's like, hey, rank yourself on a scale of like one to 10.

Speaker 2 How gritty are you? If I talk to your former boss, would they say the same thing? Because at the end of the interview process, I'm going to get references.

Speaker 2 I'm going to talk to people who worked with you in the past. So, and then like, I'm just straightforward.

Speaker 2 Like, if that doesn't align with what we're doing, I don't want to set you up for failure to come a Deduck, right?

Speaker 2 So I think I've just gotten much more comfortable just being open and honest about this is our culture. This is the way that we operate.
This is the way that you buy in.

Speaker 2 It's not going to be for everybody.

Speaker 1 What's the second order effects of anti-selling and this process?

Speaker 2 And yeah, I usually do at the end. I think it hasn't like been bad.
It hasn't had any negative effects.

Speaker 2 I think it's been beneficial in the sense that like it's helped, it has helped us filter out people. And in the moment, they may not give you the answer that they think you want to hear.

Speaker 2 They'll probably give you an answer that you want to hear. But I think we have seen some folks drop out of the process because this just isn't a lot of them.

Speaker 2 And that's actually what we want to have happen. Yeah.

Speaker 1 So there's $100 trillion, $100,000 billion going from baby boomers to Gen Z and some younger millennials.

Speaker 1 How's that going to affect the marketplace, trading, dub, and my generation, Gen Z, the younger millennials?

Speaker 2 We live in a more polarized environment than we ever have in history, maybe sort of modern history.

Speaker 2 And part of that is just we see it in our politics, we see it on the ground, the wealth gap is growing faster than ever. And also this change in how people view wealth building.

Speaker 2 I'll give you a statistic. We just did a survey with the Harris Poll, a nationwide survey with thousands of U.S.
Americans. And now

Speaker 2 the Gen Z, majority of Gen Z believe that the fastest way to become a millionaire is through investing. And they want, on average, they want to become a millionaire by 32 years old through investing.

Speaker 2 And And that rises to 64 years old when it comes to baby boomers or the older folks that were queried.

Speaker 2 I think this comes down to this, this psychological shift where people are super risk on when it comes to the younger generation where all this money is going to go to.

Speaker 2 And what they crave more than anything is the dopamine hit, the agency having control over the decision making.

Speaker 2 And that's why we've seen risk assets like crypto, options, and all these things have a mega boom over the past couple of years, reflective of the product that consumers demand right not all that is going to be able to funnel into that right there's some things you can't move around whatever trust structures and stuff like that but if we think about what the next generation wants in terms of investing products it's scary right uh most retail investors don't know how to trade these effectively they're very esoteric assets the volatility is incredibly high i think that's dubb's onus here is uh what i think I respect guys like Robin Hood and the platforms that made investing free and opened it up.

Speaker 2 And that's been incredible for industry. It's increased the market share and market size drastically, but it's not enough, right?

Speaker 2 You're giving people the keys to the casino, but you're not teaching them how to play poker.

Speaker 2 And I think Dub's onus in like the next generation of companies is not just increasing access to investing, but how do you educate people to invest better?

Speaker 2 And if that's not there, people are just going to continue losing money. That's the missing part of the equation.
And that's what I'm afraid for during this great wealth transition.

Speaker 2 If that's not there,

Speaker 2 I think we're set up for, in many ways, failure, protecting those assets well for the long term.

Speaker 1 Double-click exactly on what do users go on dub to do?

Speaker 2 Yeah.

Speaker 2 So, when you sign on to Dub, you open a brokerage account like you would with Robin. We're a broker dealer as well.

Speaker 2 But when you deposit money, you see sort of portfolios or these baskets of assets that you can invest in. And it's not single-stock trading.
You're investing in a portfolio strategy, essentially.

Speaker 2 It's kind of like you can think of it like investing in an ETF. The whole idea is that these portfolios are managed by people on the platform who have real track records.

Speaker 2 So today we have hundreds of these creators who are existing or former hedge fund managers, wealth advised RAs that have hundreds of millions of dollars of assets, these financial influencers with like 500,000 followers that you see on X who have been some of the most prolific traders that have engineered some of these retail sort of meme stock movements over the past couple of years.

Speaker 2 And the whole idea is like, hey, with the tap of a button, you can follow everything they do in their portfolio automatically.

Speaker 2 And of course, that's not going to guarantee better investment outcomes, right?

Speaker 2 But I do think on a probabilistic scale, when you're following someone who has a proven track record and you can see their whole transparent trading history, it's probably on average better than trading yourself.

Speaker 1 Let's say you don't believe in alpha, which I believe in the mostly efficient market hypothesis. I do think there's some alpha, but let's say you don't even believe in that.

Speaker 1 There shouldn't be negative alpha. So if we just invest in all companies with the letter A or with a letter B, you shouldn't do that much worse than picking, quote unquote, picking.

Speaker 1 And I think what's important there is the agency that people feel on platforms like Dup. My mom will give me a call and she said, hey, I watched an interview with Alex Carp or Uber.

Speaker 1 Like, should I buy Palantir? Should I buy Uber? And I'm always like, you know, do whatever you want because you can't really do wrong. The worst thing is actually not being in the market.

Speaker 1 Absolutely. But if you just randomly pick stocks, you're actually doing pretty well.

Speaker 2 Yeah, 100%. And part of it is just simple.

Speaker 1 Which, by the way, is not the case for crypto or random meme coins, which sometimes there's like ruckpools.

Speaker 2 It's not an efficient market.

Speaker 1 Right. It's not a nice image.

Speaker 2 Alpha is more important, the fund manager. I think you hit on a really key point for us is like part of it is even just simplifying investing, getting people more into investing, right?

Speaker 2 Like it's hard to learn which stock to pick, just like your mom, like, what do I actually do when you trust a human being, which we're much more, we're born to do that. We do that subconsciously.

Speaker 2 We understand humans. It's really the influencer economy in many ways coming to investing.
And most of my product decisions today, I go on, Yelp, to decide what restaurant I go.

Speaker 2 I decide what I buy through this instagram influencer uh it's the same thing for now we're bringing it this new behavior to how you deploy capital and uh i think that just done well will onboard more people into investing get them more comfortable get them more familiar if we do that like this right now is like 40 to 50 percent of americans do not even own a single stock today they're not participating in the greatest wealth creation engine capitalism the american dream it's the ownership economy and i think it's kind of scary to think that in ai like we're going to be creating more market value than ever before before.

Speaker 2 If a lot of Americans aren't participating in that, we're just going to perpetuate it.

Speaker 1 And even worse, some people believe that true the rate of inflation is higher than the CPI. Yeah.
And assets bubble up and income stay flat or

Speaker 1 go up by a little bit. So there's this increasing wealth gap between the rich, those who own assets and those who don't.

Speaker 2 Yeah. And I think that's, if we can make investor simpler and more familiar and bring more, even a 10% debt in that, I think we'll do so much change in the market.

Speaker 2 The thing that shocked me is amazon when they ipo 1970 since ipo to today adjusted for all the stock splits the stock is up 225 000 with three zeros uh i think ipo post ipo not as i not even as a private company so that to me is like if you draw that parallel to ai and the mag seven has a very similar profile as that uh everyone needs to participate in that so that's why i'm really excited about some of the things that i see in the current administration where trump accounts right like whatever you want to label whatever you want to call it starting out every kid in the U.S.

Speaker 2 with $1,000 in their bank account, they're going to inevitably participate in the future American innovation.

Speaker 2 And that is the one thing that the more that we've grown and the more that we've scaled, I get more passionate about is how do we get everyone level of playing field of participation and what it means to be American.

Speaker 2 And that's why we immigrated here as my parents came is to have ownership. Yeah.
And that is the beauty that I think a lot of people forgotten with all the noise today.

Speaker 1 I think if you bring it down to neurobiological level, so in our brain, whenever we have a new activity, a new neural pathway is formed, negative and positive. So smoking, same thing.

Speaker 1 That's why it becomes habitual, but trading too. And if you could get people just doing right action, even in small dollars,

Speaker 1 even in these esoteric trades, which I want to get into,

Speaker 1 it's very pro-social for them and it completely changed the trajectory of their life.

Speaker 2 Absolutely.

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Speaker 1 Speaking of traits, tell me about how you could follow Nancy Pelosi's trades. It's a meme.
I didn't know that you actually operationalize that. So tell me about that.

Speaker 2 Yeah, absolutely. So Nancy Pelosi, the queen of investing, our favorite.

Speaker 2 By the Stock Act of 2012, every single sort of person in Congress needs to file any stock trades or their spouse's stock trades or the immediate family within 30 days, right?

Speaker 2 And this is part of the disclosures, and they get fined if they don't. So Nancy Pelosi just happens to have made some really phenomenal trades over the past 20 years.
And it's actually not her.

Speaker 2 It's her husband, Paul Pelosi, who is a like, he's made a bunch of money as a VC private equity investor. But their spouses, they talk pretty much every single day.
Nancy's public denied.

Speaker 2 She's here to information, but just can't. She's the speaker of the house.

Speaker 2 She was, at one point, the most powerful woman probably alive, or at least within the U.S., right? On dub, as of today, I checked today morning.

Speaker 2 She's been up since inception, which is, I think, in September of 2024 or 2023. She's up 188%.

Speaker 2 We've made her customers tens of millions of dollars through copy trading Nancy Pelosi's picks. And yes, there's a 30-day lag.

Speaker 2 She has a 30-day window to follow her trades, but Nancy mostly does long-only stocks or leaps, sort of far out, sort of options calls. So she doesn't trade too much.

Speaker 2 So she's been long-only and she's been really long-holding the top AI stocks, Nvidia, and a couple esoteric ones, like some biotech stocks that absolutely popped.

Speaker 2 And now it's pretty cool because you see whenever her filing comes out, she moves the markets and we see what dub.

Speaker 1 Now reflexive, not only does she have insider information, she's also moving the stock.

Speaker 2 Absolutely, because there's so many people paying attention to what they're doing. And we've got enough capital on the platform where it kind of follows through now.
Yeah.

Speaker 2 And, um, but I do want to highlight that Nancy Pelosi, um, she's viral. She's famous.
Yes, she's made a lot of money, but who knows if the alpha will continue, she not retired soon.

Speaker 2 That's only one of hundreds of different investing strategies that you can now copy trade on the platform.

Speaker 2 And I think the vision has been like, hey, we got a lot of early success because we got, we leaned on the viral distribution, the viral content, Pelosi, and we did make a lot of money.

Speaker 2 But now it's like, how do we build this entire marketplace of investing strategies across asset classes across discretionary quantitative strategies and really bring on the best talented sort of managers or creators or traders to the platform to deliver alpha for our customers you're kind of like creating a mini citadel where you have you give people money or or they come in with a track record they're able to raise some money and prove themselves in the market and then the good ones get promoted with more capital and the bad ones basically get fired.

Speaker 2 100% we're meritocratic marketplace, right at ken with citadel and ken griffin i guess it's controlled and centrally but any pm can plug into this phenomenal system and infrastructure that they built data systems trading risk management and ken gives you the money and then you go trade and they've got hundreds portfolio managers they scale that system up or dub it's the same thing we've got hundreds of creators or traders now on the platform their money is not coming from me but from our create our customers our retail investors maybe a hundred dollars but you multiply a hundred dollars over a million that's a lot of money and it's a substantive sort of move in the market.

Speaker 2 So that's a lot of assets. And then we give them the execution or the brokerage.
We give them the data. We give them the tools.

Speaker 2 And then we also give them the, I think, the most important piece, which is visibility and distribution.

Speaker 2 The moment you come onto Dub, if you make it onto our leaderboard, we're putting you in front of millions of eyeballs and we're helping you attract capital and we're doing the marketing.

Speaker 2 And I think that's probably the most powerful.

Speaker 1 You're separating the skill from the marketing. So if you think about a stack of skill, you have some really great investors that are really great marketers, but it's a completely different skill set.

Speaker 1 Most great investors are great investors. Sometimes it's because they're super nerdy, super introverted, never talk to anyone, and almost autistic.

Speaker 1 And then you have the marketers that are just really good at sales, and it's just two different absolutely.

Speaker 2 I think that's one of the problems we're solving the market, too. It's so easy to go on X.
You might have been great at marketing, but you might suck at trading.

Speaker 2 But everyone might think you're good at marketing because you made this call and you deleted your 30 other tweets.

Speaker 1 We're not going to mention any of those names.

Speaker 2 We won't.

Speaker 2 But now there's on dub, you can't fake your track record. It's fully transparent.

Speaker 1 A lot of institutional investors, they saw what happened in GameStop, and it was kind of almost entertaining to see this kind of meme stock.

Speaker 1 There was no such thing as a meme stock before, I believe, GameStop and before that whole craze. And they saw it again.
Then you could dismiss that as a COVID thing. But now it's coming back.

Speaker 1 You have open,

Speaker 1 what just happened, like the basically a hostile takeover of open.

Speaker 1 Some stocks, without disparaging them, are seen as meme stocks. It's not binary.
Some are are somewhat meme stocks. What do you make of this? And how does social media play into the trading of stocks?

Speaker 1 Because it's a completely new phenomenon. Yeah, absolutely.

Speaker 2 And I think it's very hard to model out, but it's the, to me, it's like the little guys finally come to the table and the individuals are in many ways eating the institutions.

Speaker 2 With the GameStop, we took down one of the top hedge funds, Melvin Capital. It was very short.
It's like we're with what we talked about earlier. Retail volume is 20 to 35% of the daily tape.

Speaker 2 That means that's significant. Even just a chunk of retail retail investors coalescing together, you're going to destroy and go through the order book.

Speaker 2 You're going to make a significant impact in the market.

Speaker 2 I think people are waking up to the reality that because these new distribution channels of social media and places like Dub that we're creating, we're giving power back to the individuals.

Speaker 2 And I think that's so important. And part of the individualism that is so important is part of a fundamental American ideal.

Speaker 2 And I think empowering that helps people be better fiduciaries to the company. And that's part of the beauty of also being a public company.

Speaker 2 You have retail investors being part of your company now that can vote, that can drive social influence. So I think it's a really good phenomenon that's happening.

Speaker 2 Yes, it may make people, I guess, like running these companies a little more scared of not doing well. I think it drives accountability, will ultimately help companies be better.

Speaker 2 And that's what we saw with Open, right? Like, I guess the retail army, the stock at the high was at $35.

Speaker 2 At the bottom was at 50 cents, dropped by 98%, basically, since its highest over the past two or three years. Clearly, the management team isn't doing something something right, right?

Speaker 2 So the retail army forced their way back in, bought the co-founders, Eric Rue and Keith Rapoy, back on the board. And now the stock is back up to $7.
It's up 1,209%.

Speaker 2 Not close to 35%, but still a big jump from 50 cents to 7%. That may be just not be based on fundamentals yet, but I think that is the power to drive change.
And that company might have just died.

Speaker 1 It's not purely a momentum trade because they turn momentum into intrinsic value. That's the interesting thing.

Speaker 1 GameStop started essentially looking at themselves as an asset manager, not as a gaming company.

Speaker 1 Just walk me through that. So, at which point does the momentum turn into something real? Yeah.
And what is that realness?

Speaker 2 This is where it kind of cuts both ways: is when your stock goes up so high, right, then you can leverage that stock price to do a lot of things and bring more assets, stock buybacks.

Speaker 2 You can get debt on sort of that stock, right? So now the company all of a sudden has a lot more money to work with to go do other things.

Speaker 2 So in the GameStop case, or a lot of these meme stocks, right, maybe the core business isn't doing that well, but you can take those assets to go do a Bitcoin sort of fun strategy right micro strategy you can take those assets to go do a lot of things that may have actually real intrinsic value so i think that's a play playbook that you're seeing and i think management teams are getting more creative even amc right they issued like two second class of shares third class of shares and they're able to bring a ton of money back in their coffers some of that financial engineering broadly is good i think some of it is bad i think there needs to be some more transparency around that but part of it is like some retail investors are kind of blind going into this so part of the job is, I think where Doug can come in is like how to deploy that capital better, trust someone who actually knows what they're doing, how to read sort of some of these financials, understand the basic mechanics of these complex financial instruments, and actually decide, should we go into that or not?

Speaker 1 So I have Cliff Asnas from AQR, founder and CIO. He talked a little bit about his quantity, legend, quant strategies.

Speaker 1 Outside of following Nancy Pelosi, which is a clear alpha trade in terms of her information, what do you believe is behind the alpha in your top traders?

Speaker 1 What are they doing outside of getting insider information illegally? What legal strategies do you think that they're doing?

Speaker 2 I see this in a couple of different slivers. One is a lot of our sort of top traders, they are focused not on the large cap growth stocks, but they're mid-cap, small caps, and micro-caps.

Speaker 2 And because you just can't inject as much capital into there, the bigger funds traditionally just don't focus in those stocks.

Speaker 2 If you have $10 billion assets, you can't put it in a $300 million company. I still think there will always be alpha in smaller cap companies because there's just less attention.

Speaker 2 There's more divergent, it's sort of asymmetric information where you can still have an edge by talking, getting to meet these management teams that you may have not sort of had in the past.

Speaker 2 So I think that's one bucket. Two is like, we just have some of these old school style Paul Tudor Jones sitting onto screens, reading the tape, traders that just stare at the screens all day long.

Speaker 2 They truly have just incredible intuition. And they do mainly swing trades.
So quick sort of in and out. Maybe you might, the holding period might be sort of a day or two or a week at max.

Speaker 2 And I just don't know.

Speaker 2 I think there's something that the magic spice sauce right of some of these guys who just kind of know the flow and they're so good at sort of that I think the final bucket is really the emergence of leveraging social influence to drive alpha when you can do something like open door which came out of the retail army with one person Eric Jackson this famous hedge fund guy who orchestrated the Carvana Rise he similarly pushed up sort of open and he made a lot of money he had a big position to open right so if you see a lot of these guys now with a massive audience you got a couple million followers, you can now start leveraging sort of your sort of base to galvanize them behind your views.

Speaker 2 And yes, some of this might get a little tricky with sort of disclosures and stuff, but it's just kind of like going on CNBC in the old days, right? And talk and shop about your stock.

Speaker 2 There's new distribution channels that are much more close to the people and less centralized in terms of power, where it's anyone can make a Twitter account and gain a following, and then you can drive real change in price movements.

Speaker 1 Similar to the Bill Ackman, Bill Ackman, a friend of the pod, he would send out these research reports, these very long research kind of activist trades. This is why this is overvalued.

Speaker 1 This is why this is undervalued. And basically come in and do an activist takeover.
This is kind of the same thing, but bottoms up from the crowd. It's like crowdsource activism.

Speaker 2 Yeah, I love that term. I think that's spot on.
Yeah. And then I think it's just that the power of that just amplified to the nth degree now.
It's so easy to sort of for something to go viral.

Speaker 2 And the algorithms, I think the social media algorithms are trained to drive this sort of content. So I think you've got all the factors sort of coming in to sort of drive this push forward.

Speaker 1 Preparing for this interview, I found that we had a lot of great friends in common, Dash, Bradley Tusk, a lot of some of the smartest and most contrarian thinkers in New York City.

Speaker 1 How do you build out your advisory and your information diet? And how do you make sure that you're talking to the smartest people and getting the best people around up?

Speaker 2 When I first moved to New York City, I think we had some phenomenal investors. You got the CEOs and founders, Uber, Airbnb, Robinhood around the table.

Speaker 2 But a lot of those investors, right, they're like, you might get an hour of their time.

Speaker 2 And it's great that sort of the hour of time that you get every quarter or a year, it's very valuable, but it's not enough to build a real in-depth relationship.

Speaker 2 So I think for young folks who moved to New York City without a network, I made it my mission in the first year or two to find the smartest people I could in New York City. What I did was I love food.

Speaker 2 I found a couple of restaurants that I absolutely love. I host these dinners where I'd ask the smartest people I know to bring a plus one.

Speaker 2 And within two years, I'd built this phenomenal network of the smartest people I know. I keep it tight.

Speaker 2 I don't have that many friends, but I'm truly a believer of the, you're the average of five people you spend the most time with.

Speaker 2 And I really just focus on those in-depth relationships, on the one-to-one stuff. I do sort of selectively meet by trade the business and Bill and Dub.

Speaker 2 I meet brilliant people every day, especially on the investing side. But the personal information diet, honestly, these days, I just spend a lot of time talking to ChatGPT.

Speaker 2 Even on my way home, I just talk to audio mode. It helps me become more articulate, helps me sort of synthesize information faster.
Outside of that, I'm a big fan of, I know, friend of David Senra.

Speaker 2 Like, I love reading autobiographies and a huge fan of philosophy too.

Speaker 2 I love thinking about life. And I ever went back to school, I'd probably be a philosophy major.

Speaker 2 I think there's a lot of open-ended questions of like the sterny of like the hardships and like for what cause, right? We're all going to die one day and sort of nihilism, absurdism.

Speaker 2 But so why do we build what we do and like finding passion in the day-to-day? I think one thing that I like to say is like, I don't know if I'm actually happy every day and probably not.

Speaker 2 There's a lot of things I do that I don't want to do from admin work to like going to work out the gym. But am I fulfilled over the long term? Hell yeah.

Speaker 2 And that to me, I think, is the propelling force over the long run that drives sort of the human existence and ability to grind it out for a long time.

Speaker 1 I got to shadow Jim Jordan, one of the top kind of private equity investors back in the day in college.

Speaker 1 And I was like this wide-eyed kind of college guy that really loved business and loved everything about it. And I was sitting next to him and he was signing documents.

Speaker 1 I'm like, are you passionate about about what you do every single day? He's like, look at how passionate I am signing these documents.

Speaker 2 And

Speaker 1 it was pretty brush, but the point was made, which is like, it's absurd to think that if you're doing something and you're not loving every single second, you're doing the wrong thing.

Speaker 1 There's this meme out in the market that's so destructive to people creating great things because if you're lucky to have 30, 40% of what you're doing, like bring you energy and bring you happiness, you're on the right path.

Speaker 1 And a lot of people kind of like, well, I'm not constantly smiling. Not every, I have to file my taxes.
So this can't be the thing that I dream of.

Speaker 1 Yeah, it's kind of like one of these very destructive memes out there.

Speaker 2 I completely agree with you, and I think you're just grappling with reality right now. Everything's going to be perfect.
And

Speaker 2 my

Speaker 2 most influential book I think I read during high school was The Myth of Syphysis. It's by one of my favorite philosophers, Albert Camus.

Speaker 2 And Syphysis is the god that's condemned to pushing Boulder up the hill. Then we get stopped, it resets.
And Camus's book, Mythosis, the final line, is one must imagine Sisyphus happy, where

Speaker 2 it was an awestruck moment where it was like the guy is happy or he found joy in the difficulty of the process of pushing the boulder up the hill. And that's like life.

Speaker 2 You go up the hill, you reach an achievement, but then you're reset, you're back to the same thing every single day, and until you die. So I think that's part of what I've really internalized.

Speaker 2 That gives me, I think, motivation on some low days. I've had some really low days sort of building out the company.
And you kind of, that's been the journey of growth that I've been committed to.

Speaker 2 And I'm excited to continue doing that.

Speaker 1 I think the way to operationalize it is literally stop and smell the roses. Today I have my first podcast on New York Stock Exchange.
You know, we're in this beautiful, I mean, this is emblematic.

Speaker 1 Get to talk to people like you and just to stop for a second and just be thankful for where you are. I think that's like the operation.
It's like, how do you operationalize being more graceful?

Speaker 1 You literally have to stop and appreciate, take a picture and not always take everything for granted. Sometimes we can move so quickly.

Speaker 1 You've raised raised $47 million and it's always the next milestone. You're like, holy crap, I've raised $47 million.

Speaker 1 I have millions of users. Like that's, that itself is an incredible achievement.

Speaker 1 Yes, you want to go, you want to go public here. You want to go, you know, ring the bell.

Speaker 1 But at the same time, it's, you know, those milestones are meaningful and are things that one in million people are able to accomplish.

Speaker 2 Truly. Yeah.
And I feel very blessed. And sometimes like it's hard to internalize that, like you said, every single day.

Speaker 2 But to me, it's like, I tell my team this, your words are the house you live in. And even like waking up in the mirror and saying, like, dang, yeah, you're going to have a good day today.

Speaker 2 Those moments of slowing down can really just change the perception, your psychology of injecting a little bit of really healthy energy into your beginning of your day.

Speaker 1 Are you doing some meditation?

Speaker 2 Absolutely. Yeah.
Walking meditation, guide to meditation. I love the Waking Up app by Sam Harris.
My CEO coach recommended me to it, and I've been addicted to that ever since.

Speaker 1 Yeah. I have been doing a lot of sound meditation and and gong therapy, which is it's crazy.
There's a lot of actually scientific literature on it. I was surprised myself.

Speaker 2 Yeah, to me, it's like I used to think it was voodoo BS, but now, like, think about every great wisdom tradition in the history has evolved towards bringing some form of meditation into the day-to-day life and how they perpetuate it.

Speaker 2 So, I think it's just an incredibly powerful tool. It's a technology, it's an ancient technology, and it's a travesty if you don't apply it.

Speaker 1 If you could go back to 2021 when you were just starting dub, and you could give yourself one piece of timeless advice that would either help you accelerate dub or help you avoid mistakes.

Speaker 1 What would be that one piece of advice?

Speaker 2 Oh, that's a good one.

Speaker 2 What got you here will not get you to where you want to go.

Speaker 2 I would say I thought there was a right way to do things, and I tried that, and that drove me to the ground in many ways, psychologically.

Speaker 2 The early days of the company, I made a lot of people mistakes, and we let a lot of people go. And there were some very low moments that I didn't think we're going to make it out.

Speaker 2 And I think it took some of those really low moments moments and taking a step back and realizing that if you don't kind of change the way that you do things, you're not gonna get to where you wanna go and really assessing that.

Speaker 2 I credit some

Speaker 2 incredible sort of investors, Jordan, some of my earliest investors, really helping out and being there in those moments and helping me realize that.

Speaker 2 I think that's been the journey I've been on since that first year started the company is this constant reinvention process of taking a look at my routines, what do I do, how do I lead the team and improving on that and treating treating feedback as a real, real gift.

Speaker 2 And I'd say that's what I tell my team every single day now. And I think it's a real skill that I've had to build up: how do I listen to feedback? How do I internalize it?

Speaker 2 And how do I build a culture where everyone is comfortable and open sharing it? Because everyone, we're just moving towards the same mission.

Speaker 2 If we truly think the best for the company and we want the best for each other, we should be brutally honest and blunt with the feedback that we give.

Speaker 1 It's all towards what advice would you have given yourself in those dark moments?

Speaker 2 Yeah.

Speaker 2 Stay cool, calm, and collected.

Speaker 2 It's so easy to feel it in the gut. And some of the worst decisions I've made is like when I feel it in the gut, I react immediately.

Speaker 2 And now I tell myself, if you feel it in the gut, don't say anything. Just wait.
Wait an hour, wait 20 minutes, just let that pass.

Speaker 2 Think about it with a rational, cool, calm, collected demeanor, and You're going to make a better decision.

Speaker 1 I've been thinking about this paradox. I haven't termed it, but as an entrepreneur or as anyone doing anything, you want to be highly ambitious, highly proactive.

Speaker 1 And yet sometimes being too proactive or too ambitious can become anti-fragile and that you're not willing to be a little patient. Being fully proactive is extremely fragile.

Speaker 1 Obviously, being not proactive at all is even worse. But is there something there? Is there something that being too ambitious or wanting to to move too fast can be self-defeating?

Speaker 1 Could lead you to always start new things and never kind of stay the course?

Speaker 2 Building a startup, I think, filters for a lot of A-type players. And a lot of A-type players for most of their life, they're used to being number one all the time, constant achievement.

Speaker 2 If you work hard, you're going to be successful, right? If you study enough, you're going to get a perfect score in the SAT. And that's how most of our life was designed.

Speaker 2 If you did enough, you were going to achieve. And it was more of a

Speaker 2 expected outcome.

Speaker 2 The probability of reaching the top was more guaranteed it was very linear and correlative to the work but in startups it's not you could try the hardest you can work the hardest and still most fail by all probability some of the smartest people I know have completely flopped their companies right so I would say I think it's important to have the mindset where yes, I think it's important to channel that ambitious energy, especially as the founder, because you need to be that spiritual soul, the inspirational leader of the company.

Speaker 2 But you can't do that at the cost of being irrational to the team. And you also also will inevitably hit those moments where your ambition is going to get hit.
You're going to have a low moment.

Speaker 2 And I think those are the moments where when I just said, like, I feel in the gut, how do you slow down and actually process that? This is just reality.

Speaker 2 And I think it's a maturity sort of, it's a process of maturation to realize that, yes, it's important to always maintain the ambition, but sometimes you need to channel it in other ways to get across the next hump.

Speaker 2 And I think that's definitely a process that I've learned.

Speaker 1 Kind of think of the world as driven by deterministic and

Speaker 1 physics, kind of the physics of business and life. And whenever I don't get an outcome, it's because I didn't follow the rules.

Speaker 1 The world does not owe me to change the laws of physics to make me successful. It's because I did the wrong thing.
So instead of thinking, oh, you know, I'm a victim or why isn't it working?

Speaker 1 It's like, no, you're following the wrong physical laws.

Speaker 1 So what should you be doing that actually leads to the outcome?

Speaker 1 And kind of going from this emotional, kind of almost like childlike state state to this highly rational, like, what needs to be done that would lead to this outcome.

Speaker 2 Yeah, absolutely. I think that's probably one of the hardest things to do is also like, what is the outcome that you want to go towards?

Speaker 2 And having a clarity of vision, because I think it's very easy to live an ambiguous life and not choose and clarify.

Speaker 2 But once you do, it's all about just closing the gap between sort of your vision and reality and to steps that you can map out. And I think that's so important for a startup on a day-to-day basis.

Speaker 2 I do it every morning.

Speaker 2 Is from everything that's small to sort of large, what is that clear picture that we're going towards? I think that's essential as a leader to describe your team.

Speaker 1 It's a navalism. Sometimes there's a time for exploration, figuring out what you're doing, and sometimes exploitation, just doing the thing every day.
That is a thing. It's not sexy.

Speaker 1 It's not something you could talk about on a podcast. What did you do? I just did more of what I did yesterday and faster.
And I hired more people to do the same thing.

Speaker 2 And then the beauty of compounding. And I think that builds up over time.

Speaker 2 That's what you can never measure in 10 minutes or talk about in a podcast, but probably probably the most powerful thing you can do.

Speaker 1 Well, on that note, Stephen, thanks so much for being the first guest for me on Capital Series for New York Stock Exchange Wired. And looking forward to continuing this soon.

Speaker 2 Thank you so much, David. This is incredible.
Thanks.

Speaker 1 That's it for today's episode of How to Invest.

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